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If you’re reading this, you’ve probably decided to purchase a home. Congratulations! It’s important to consider the different kinds of dwellings available. And two of the biggest types are houses and condominiums, or condos for short.
While both options allow you to become a homeowner and build equity in a property of your own, the similarities stop there. Specifically, many people weigh the choice to buy a house over a condo depending on their budget, space needs and lifestyle preferences. Read on to determine the outlines of the condo vs.house debate — to help conclude which option works better for you.
What’s the difference between a house and a condo?
The biggest factor houses and condos have in common is that they are types of residential real estate owned by individuals. When you buy either, you’re owning real property (unlike, say, a co-op, in which you technically own shares in a cooperative entity), and you are liable to pay property taxes each year. However, nearly everything else about them is different.
Houses (often called single-family homes) come in many shapes, styles and sizes, from modest bungalows to multi-story mansions, from detailed Victorian dwellings to streamlined, one-level ranch houses. In general, though, they’re usually detached, standalone structures, often with land surrounding them. In some cities, especially in historic neighborhoods, they can take the form of a townhouse or row house, a narrow multi-floor home that shares one or two walls with adjacent properties but has its own entrance and patch of front or backyard.
In contrast, condos are single units within a larger building, a multi-family dwelling. While condos can also take the form of row houses, the most common type of condo is that of an apartment. So you can have neighbors above, below and next to you.
Owners of single-family homes purchase the home structure and the land it sits on, while condo owners own just the unit they live in, not the larger building or the land on which it’s built. Generally, with a condo, the surrounding exterior space is shared among the condo owners.
Condo vs house: specific differences
- Cost: The cost of owning a house vs. a condo can be dramatically different, depending on your neck of the woods (or city). For instance, a condo in New York City can cost substantially more than a single-family McMansion in Boise, Idaho. Generally, though, a condo is likely to be less expensive than a house in many markets across the country — but, you’ll need to account for monthly homeowners association dues, known as HOA fees or carrying charges.
- Insurance: Homeowners insurance is typically less expensive for condo owners because they’re responsible only for the “walls in” aspect of their unit — the interior — while the HOA is responsible to secure insurance for exterior elements like siding and roofing. Owners of single-family homes must insure their entire structure, from the foundation to the roof, as well as any detached buildings like a garage or shed.
- Maintenance: In a condo community, the HOA is responsible for exterior maintenance, while condo owners must maintain areas inside their unit like the HVAC units, pest control and appliances. A house owner is responsible for all that and more, including yard care and exterior maintenance. (Here are top tips for avoiding pricey home repairs.)
- Amenities: In a condo community, the cost of amenities like a pool, gym or business center is shared among all the residents, making them more affordable for each individual. The owner of a house is solely responsible for the cost of installing similar perks on their property.
- Location: Condos tend to be located in densely populated city areas, so owners can be within walking distance to local restaurants, shops and cultural attractions. Houses, on the other hand, sit on their own pieces of land, so they can be in less dense areas. That said, many housing developments fit many homes together on small parcels of land, especially in urban environments.
- HOA rules: Most condo communities have a governing board that can dictate a variety of things: what kinds of pets residents can have, where they can park and whether they can sublet their units, for example. So, when considering a condo vs a house, it’s important to decide whether you want to abide by HOA rules. While some single-family home neighborhoods have HOAs, they are typically less restrictive and allow for greater autonomy among homeowners.
- Selling: In general, it can be easier to sell a house than a condo. Before you sell your condo, you’ll need to check with your HOA to make sure you comply with any rules, including being current on your dues. The HOA might also screen prospective buyers, which can limit your offers.
Condo vs house: Who should buy a condo?
Purchasing a condo can be great for a first-time homebuyer looking to make the transition from renting to owning or for homeowners who want to downsize, since much of the maintenance is taken care of by the HOA. A condo can also be a smart buy for someone who travels frequently or who wants to be right in the middle of a coveted part of town where single-family homes would be out of their budget. Condos also are a good choice for owners who want amenities like an on-site pool or gym but can’t afford to install or maintain them.
Condo pros
- Affordability – Condos are typically less expensive than a house, so they can be ideal for first-time homebuyers with limited down payment savings or retirees wanting to scale back.
- Less maintenance – If you own a house, all of the upkeep of the property falls on you. If you don’t want to worry about maintenance as much, a condo might be a better fit.
- More perks – Unlike a house, many condo communities come with amenities like a pool or playground, and features like security systems. If you want these for your house, you’ll have to install and pay for them yourself.
Condo cons
- Fees – Condo associations charge a monthly HOA fee to cover upkeep and other expenses, including insurance coverage for the property as a whole. They may also impose special assessments from time to time, to cover financial shortfalls or unexpected expenses. Individual condo owners have no say in the setting of these fees or choice of carriers, unless they join the condo board of directors.
- Less privacy – Since you’re sharing walls with neighbors, you won’t have as much privacy or quiet as you might be able to get with a house. And you’ll have to share amenities like the gym or pool.
- Rules – You might not have as much freedom to decorate or customize your condo, depending on your HOA’s rules.
Condo vs house: Who should buy a house?
A single-family house typically comes with a lot more space, so it’s an ideal choice for growing families or those who want complete control over structural and aesthetic decisions about their home (assuming you don’t have an HOA in the ‘hood). If you value privacy and don’t want to share common spaces with other residents, a single-family house is the way to go. However, you must be prepared to handle — physically and financially — all of the interior and exterior maintenance and repairs.
House pros
- Customizability – If you own a house and it’s not in an association, you can do pretty much whatever you want to it, provided it adheres to your local jurisdiction’s ordinances.
- Privacy and space – With a house, you might be farther away from your neighbors, so you won’t have to worry about excess noise or privacy issues.
- Easier to sell – You won’t have to get the approval of an HOA to sell your house, so there’s one less barrier when it comes time to put your house on the market. Houses also offer a better return on investment.
House cons
- Can be pricey – Depending on its location, size and many other factors, a house can be much more expensive than a condo or other type of property.
- Maintenance is your responsibility – Unlike a condo, with a house, you’re tasked with maintaining the property, both indoors and out. This can add to your costs.
- Lack of built-in community – Compared to the shared spaces of a condo, it can feel a bit more isolating in a house. You might not run into neighbors as frequently, which can be a downside if you value social opportunities.
FAQs
To a large extent, answering that question depends on your budget. Condos almost always cost less than homes, especially in desirable parts of town.If money’s not an issue, the question is: Do you value autonomy or do you value a maintenance-free lifestyle? You’ll have more of the former with a single-family home but more of the latter with a condo. Also bear in mind that houses tend to appreciate more in value than condos do.
When comparing properties in similar parts of a city or town, a condo will almost always be more affordable than a single-family home, especially when you look at list price. If it’s a particularly well-appointed condo community, though, HOA fees might make the monthly out-of-pocket costs approach the monthly mortgage payment for a house.
That depends on the condo’s HOA. If they take an active role in the selling process — particularly if they have to approve buyers or dictate a minimum purchase price — selling that condo will be more challenging. In contrast, with a house, all the decisions are up to you. If the HOA board is accommodating, though, selling a condo and selling a house can be a fairly similar process.
FAQs
Condo pros
Less maintenance – If you own a house, all of the upkeep of the property falls on you. If you don't want to worry about maintenance as much, a condo might be a better fit. More perks – Unlike a house, many condo communities come with amenities like a pool or playground, and features like security systems.
Do condos appreciate slower than houses? ›
Do Condos Appreciate In Value? Although properties can appreciate in value faster if they're in a desirable location, the fact remains that most condos appreciate in value at a slower rate than single-family homes.
What are the pros and cons to owning a condo compared to owning a house? ›
Pros and Cons of Buying a Condo
| Pros | Cons |
|---|
| May be easier to afford than a single-family home | HOA and maintenance fees |
| Location, location, location | Abide by the HOA rules |
| Increased security | May have limited parking |
| Amenities like a pool and a gym | Less storage space |
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On the other hand, when you purchase a condominium, you only own the specific unit. No land = less value. Also, it's likely that more condominium units can fit on single plot of land than single family homes, as condos are often built up instead of out. This higher supply of condos can in turn drive prices down.
What is the advantage of staying in a condo? ›
Fewer maintenance and repair responsibilities. Access to on-site amenities, such as a sauna or swimming pool, which you otherwise might not be able to afford. Enhanced security features in some condominium units.
Are higher floors better in condos? ›
Pros of Purchasing a Condo on an Upper Floor
On a higher floor, you won't have to have to deal with street noise. In addition to this, you can enjoy a great view. You'll also have a financial benefit because a condo unit on the higher floors usually has a higher resale value because of the amazing views.
Are higher floor condos worth more? ›
Higher condos get more resale value
From an investment perspective, higher condos are always better as they give the most return on the value. Investors are more interested in buying condos on a higher floor as they are aware of its demand in the market.
Why don't condos increase in value? ›
There are 5 major reasons condos historically lag in appreciation; No land - land is actually what appreciates, buildings depreciate. A condo has less land per unit. Less Able to Differentiate - selling a home one must create one of a kind to hold price (the only home backing to protected woods etc).
Is a condo or house safer? ›
Security. If you travel a lot, or for any other reason are often not home, a condo is generally more secure than a free-standing house. You'll have other people around and building maintenance to keep an eye on things for you.
How do you build equity in a condo? ›
- Make a big down payment. Building equity starts the moment you fork over your down payment. ...
- Avoid mortgage insurance. ...
- Pay closing costs out of pocket. ...
- Increase the property value. ...
- Pay more on your mortgage. ...
- Refinance to a shorter loan term. ...
- Wait for your home value to rise. ...
- Avoid a cash-out refi.
Like a single-family starter home, condos are an excellent first step into homeownership, giving buyers a chance to obtain a mortgage and become homeowners at a lower cost and with less responsibility than a single family home purchase. First time buyers who don't consider condos are doing themselves a disservice.
What adds the most value to a condo? ›
Improvements to the kitchen often yield the highest return for condo owners. The kitchen holds many areas for improvement including cabinets, countertops, sinks, faucets, and lighting. Often considered the heart of the home, the kitchen can make or break the perceived value of a condo.
Does it ever make sense to buy a condo? ›
Condos are usually less expensive than single-family homes and have lower maintenance requirements, making them good options for homebuyers on a budget or people looking to downsize. Loans can be harder to get for a condo because some lenders have strict requirements regarding owner occupancy and loan-to-value ratios.
Do condos have good resale value? ›
Yes, condos generally appreciate in value. That's true of any piece of property—as long as it doesn't have wheels or come from a trailer park. But, if you're trying to decide between a condo or a house, keep in mind that a single-family home is usually going to grow in value faster than a condo will.
Is a condo nicer than an apartment? ›
Condo owners participate in the maintenance of the common areas via the homeowners' association (HOA), so these common areas tend to be kept up nicely. Condo buildings sometimes also have more luxury amenities than apartments, including onsite parking, pools, gyms, or tennis courts.
Is it better to stay in a hotel or condo? ›
Hotels may be more appealing if you're looking for a short stay or on your own. However, for longer trips with more people, condominiums are a much better option with all the features, including internet and security, and have their own unique charm.
What are the three main advantages of renting a home? ›
Benefits of renting often include:
- Rent payments tend to be lower than a comparable house payment.
- Utility costs may be included in rental fee, creating additional savings.
- Relocation is easier.
- Maintenance and repairs are not your responsibility.
- Credit requirements are less strict.
Most of the new condominium projects today are designed and built with modern techniques and durable materials to endure the ordinary wear and tear of everyday use. Modern condos will likely remain in good shape even after 50 years.
What's the difference between a townhouse and a condo? ›
Generally speaking, condominium owners have an individual unit within a larger complex. Townhouse owners, alternatively, may share a wall with their neighbors, but they also own the structure of the home itself and the property's surrounding land.
What are the pros and cons of buying a house? ›
Homeownership Pros and Cons At A Glance
| Pros | Cons |
|---|
| Tax deductions | Upfront costs |
| Can help increase your credit score | Property taxes and other recurring fees |
| Privacy and control over own space | Responsible for the work and cost of home repairs |
| Feeling of accomplishment | Less flexibility to move |
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The top floor is the most secure out of all the levels. Thieves or other invaders will rarely make their way to the top of the building. If you're on the top, you can feel safe from people who might push into the building from the outside.
Which floor is the noisiest? ›
Higher is noisier – noise travels upwards and that is why higher floors tend to be noisier (it usually starts to reduce from around the 15th floor). Banging from construction work nearby can be heard acutely on higher floors even through the source of the noise can seem very far away.
Which floor of condo is best? ›
Upper floors tend to be more expensive due to excellent attributes such as better views, privacy, enhanced safety features, and reduced noise. Demand for top-floor apartments is frequently higher, which may lead to good investments and may resale at a higher price.
What are the disadvantages of ground floor condo? ›
One of the biggest drawbacks of moving to a ground floor apartment is the lack of ventilation. Since ground-level apartments are built on the lowest level of an apartment complex, you may rarely come across any kind of natural air flowing through your living space. This may result in poor ventilation.
How important is a view in a condo? ›
A view makes a space more valuable, but the best view cannot compensate for bad space. Size matters of course, but it's not always about the biggest. How it's used is just as important. Anything pleasant to the eyes will add to the experience.
Why are higher floors better? ›
Pros of higher floors
Reduced noise and better ventilation: The level of noise pollution on the higher floors is relatively less than on the ground floors. Sounds of traffic and other noisy commotion won't bother you much. Also, you can have more fresh air as compared to lower floors.
Do condo fees ever decrease? ›
It's always the board's decision in the end on how money is spent but it's your money, so help with ideas on how to save some if you can. And if the rationale is there and it doesn't impede the financials or the functioning and services of your building, then yes, condo fees can actually go down.
How much do most condos cost? ›
The cost of a condo will depend on several factors, including location, size and amenities. Condos can range from as low as $140,000 in Ohio to over $1 million in California, with an average price of $370,700 across the United States as of November 2022.
Is buying an apartment unit a good investment? ›
Investing in an apartment complex is one of the most time-tested ways to build wealth. In fact, multifamily investing has an incredible array of benefits, including cash flow, the ability to finance properties with a limited amount of money down, and incredible tax benefits — just to name a few.
How can I live in a condo safely? ›
10 Condo Safety Tips
- Know who you are letting in. Sometimes we just want to be good neighbours and hold the doors open. ...
- Get to know your neighbours. ...
- Be aware of suspicious behavior. ...
- Always lock up. ...
- Be mindful of the parking garage. ...
- Keep your buzzer ID simple. ...
- Know your exits. ...
- Use your peephole.
Yes, you can rent a condo, but you'll want to be sure to follow the condominium boards rules and regulations. These rules are one of the key things that makes renting a condo different from renting an apartment.
What is difference between townhouse and house? ›
Perhaps the most obvious difference between a townhouse vs. single family home is the structure. Townhouses are attached to one another, with each having at least one shared wall with adjacent townhomes. Single-family homes are freestanding, typically on a plot of land that also belongs to the homeowner.
What builds the most equity in a home? ›
How To Build Equity In A Home
- Make A Big Down Payment. ...
- Refinance To A Shorter Loan Term. ...
- Pay Your Mortgage Down Faster. ...
- Make Biweekly Payments. ...
- Get Rid Of Mortgage Insurance. ...
- Throw Extra Money At Your Mortgage. ...
- Make Home Improvements. ...
- Wait For Your Home's Value To Increase.
Home Equity Loans and Lines of Credit
If you don't need to finance the entire value of your condo, you may also consider a home equity loan or a home equity line of credit. These are similar to mortgages in that they're both secured by the equity you have in your home.
How much equity do I have in my condo? ›
You can figure out how much equity you have in your home by subtracting the amount you owe on all loans secured by your house from its appraised value. This includes your primary mortgage as well as any home equity loans or unpaid balances on home equity lines of credit.
What are the HOA fees? ›
HOA fees are charges levied on owners of many condominiums, co-ops, and certain neighborhoods. These fees cover the maintenance and upkeep of common areas such as shared hallways, elevators, lobbies, and parking lots. It will also usually cover snowplowing, gardening, and damage to common areas.
What are the pros and cons of a townhouse? ›
Townhouses are often built as part of gated communities or neighborhoods. Pros of townhouse living include affordability, HOA and shared amenities, and close proximity to neighbors. Cons of townhouse living include less square footage, less freedom about your home's appearance, and less privacy.
What does condo mean in America? ›
A condo, also known as a condominium, is a housing or residential complex in which there are separate units, with each unit being owned by an individual. When someone rents a condo, they're renting directly from the condominium owner.
What gives a house the most value? ›
Home Improvements That Add Value
- Kitchen Improvements. If adding value to your home is the goal, the kitchen is likely the place to start. ...
- Bathrooms Improvements. Updated bathrooms are key for adding value to your home. ...
- Lighting Improvements. ...
- Energy Efficiency Improvements. ...
- Curb Appeal Improvements.
5 Simple Upgrades to Increase Your Condo's Market Value
- Go Granite. Minor kitchen upgrades are one of the changes that can bump your condo to the top of the list with buyers—while also boosting your asking price. ...
- Refresh Appliances. ...
- Bring On the Bathroom. ...
- Reflect on Flooring. ...
- Step Up Your Storage.
Maximum value will be added by improving the main living spaces, such as the kitchen, dining and living area and the way in which they work together. Before removing walls, work out which are loadbearing by checking the direction of the floor joists as these should always rest on structural walls.
What are the pros and cons of a condo? ›
Pros and Cons of Buying a Condo
| Pros | Cons |
|---|
| May be easier to afford than a single-family home | HOA and maintenance fees |
| Location, location, location | Abide by the HOA rules |
| Increased security | May have limited parking |
| Amenities like a pool and a gym | Less storage space |
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The majority of homes in the U.S. are single-family homes. They're less common in highly populated areas and are typically found in suburbs.
How much is the average condo in LA? ›
LA condo sales sluggish, as real estate market softens
In that time, sales prices grew—but not by much. The median sale price of $430,000 rose just under 2 percent, according to data released by the association.
What are the pros and cons of owning a townhouse? ›
Townhouses are often built as part of gated communities or neighborhoods. Pros of townhouse living include affordability, HOA and shared amenities, and close proximity to neighbors. Cons of townhouse living include less square footage, less freedom about your home's appearance, and less privacy.
What is the difference between a duplex and a townhouse and a condo? ›
The biggest difference between a duplex and a townhouse or apartment or condo is ownership. In a duplex, the entire building is owned by a single person and both sides are rented out. Now, that isn't to say that a person can't buy the building and live on one side of the duplex. This actual happens quite often.
What's condo meaning? ›
A condo, also known as a condominium, is a housing or residential complex in which there are separate units, with each unit being owned by an individual. When someone rents a condo, they're renting directly from the condominium owner.
